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As retailers started to focus more on their online and e-commerce business, due to the pandemic, and as consumers started to prefer online shopping, the retail media platform took off, and leading the way are the sponsored listings. This venture meant an additional revenue stream for retailers, an increase in sales for suppliers or brands, and a personalized advertising and retail experience for shoppers!
What Are Sponsored Listings?
Sponsored listings are ads that appear at the top of a list of products or services on a website or application, and are highlighted as “sponsored”, “Ad” or something similar to indicate that they are paid placements. This type of advertisement, allows businesses to pay for better visibility and exposure while offering an improved advertising experience for the consumer.
Although they can blend in almost seamlessly with the organic listings present on a website, these types of ads can sometimes include dynamic elements such as product images, prices, and reviews that would make them stand out. However, their strategic placement within prominent sections of product listings, ensures maximum visibility, increasing the likelihood of attracting consumer attention and driving clicks and conversions.
Sponsored Search Ads
This term is widely recognized in the context of search engine queries and paid search activities. Similar to the functionality of Google search, within retail media, the sponsored search format pertains to advertisements displayed prominently at the top of the page among the results presented to consumers following a search query.
Sponsored search ads perfectly answer the consumer's search intent on e-commerce platforms. As consumers are looking for certain products and perform searches on these websites, sponsored search ads are placed at the top of the search results, creating a non-disruptive shopping experience while perfectly resonating with the user's search intentions.
Sponsored Brand Ads
A Sponsored brand ad is similar to a display banner ad, and it is positioned above search results. It includes the brand’s logo and a number of the brand’s products or services. Sponsored brand ads grant prominent visibility to the brand’s products or product lines capturing the attention of users actively seeking related items. This increased exposure enhances brand recognition and recall.
Sponsored brand ads also enable brands to showcase multiple products within a single advertisement, allowing for a more comprehensive representation of their offerings.
Source: Walmart.com
Sponsored Listings Use Cases
Big Retailers and E-commerce Platforms
Big retailers that sell a large range of products and brands employ sponsored listings extensively. For instance, a major grocery retailer like Tesco leverages sponsored listings to provide suppliers an opportunity to shine amidst a diverse product range or spotlight exclusive deals. At the same time, this approach generates an additional revenue stream for Tesco while ensuring a non-intrusive experience for its customers. Below is an example of a sponsored search for the keyword “toothpaste”:
Source: Tesco.ie
Marketplaces
Another type of business that benefits from the use of sponsored listings is the marketplace. Many types of businesses can be classified as online marketplaces, from booking sites for travel, transport, to rental websites for cars, accommodation, activities, etc., to Auto-marketplaces, apparel marketplaces, furniture, fixtures, and accessories (FF&A) marketplaces, local social listings websites and recommendations or review sites.
If we take the example of a car auto marketplace or an accomodation booking website, the sponsored ads will show at the top of the page, followed by the organic listings, as seen in the image below. To give you an even better understanding, our developers created two websites: Brum Brum and BeMyBnB.
Benefits of sponsored listings
Contextual Relevance
Sponsored listings leverage the context of a consumer's browsing intent on e-commerce websites. When users browse various product lines or categories of products, these ads appear seamlessly at the top of the product listings, aligning perfectly with what the user is browsing for. This contextual relevance enhances the chances of conversion by offering products that directly match the user's interest.
Strategic Placement
Sponsored product listings are often placed in highly visible locations, such as the top of search results or prominent sections of product listings. This means that sponsored product listings are often the first thing that users see when they search for a product on a retail website. This strategic placement ensures that they are seen by more users, which increases the chances of clicks and conversions.
Precision Targeting
Keyword Targeting
This is a powerful advertising tool when it comes to sponsored listings as it allows brands to connect with users who are actively seeking products like theirs. Advertisers choose keywords that are relevant to their products and target audience. When users enter these keywords in the search bar, the sponsored product listings associated with those keywords are displayed. This precision targeting ensures that the ads are seen by the right people, at the right time, and in the right context.
First-party Data Targeting
Retailers possess a valuable asset in the form of 1st party data, including insights like purchase history, geographic location, and various other data points. Leveraging this data treasure trove, retailers can ensure that sponsored listings will reach the most relevant audience. By strategically analyzing purchase patterns and historical data, retailers can tailor their sponsored listings to align with individual preferences and past buying behavior. Moreover, incorporating geographic insights allows retailers to localize their listings, ensuring that products are showcased to users in specific regions where they are more likely to be sought after.
Improved Customer Experience
Sponsored product listings offer a more comprehensive shopping experience for consumers than display ads. This is because sponsored product listings appear alongside organic search results, giving consumers more options to choose from. Additionally, sponsored product listings include the product price, star rating, and number of reviews, which helps consumers make informed purchase decisions.
- They are more relevant: Sponsored listings are targeted to users who are actively searching for products like the one that is being advertised. This means that users are more likely to be interested in the product, and they are more likely to click on the ad.
- Offer more information: Sponsored listings include the product price, star rating, and number of reviews. This information can be helpful for consumers who are trying to make an informed purchase decision.
- Are less intrusive: Sponsored listings are typically displayed alongside organic search results. This means that they are less intrusive than display ads, which can be annoying to some users.
Competitive Edge
Sponsored listings can help brands increase their visibility and sales by outshining their competition in search results. Brands and retail suppliers who use sponsored listings are more likely to get consumers to click on their ads and make sales.
In online shopping, given the multitude of options available, sponsored listings help things get noticed and give brands a competitive edge. They work like guides that steer people toward what they want. These listings not only lead to immediate sales, but they can also help build good relationships with customers over time.
Monitoring Performance
The strategic positioning of these listings close to the point of sale offers marketers a distinct advantage in terms of tracking and assessing the effectiveness of their advertising efforts.
The immediate connection between the sponsored listings and the potential consumer's purchase journey creates a seamless path for monitoring key performance metrics. Marketers can readily analyze critical data points such as click-through rates (CTR), conversion rates, and return on ad spend (ROAS) due to the direct linkage between the ads and actual purchasing behavior.
Flexibility and Adaptability
Sponsored listings can be used in various places on a website such as in search results, part of the listings displayed while browsing categories, in well-known sections like “You might also like” or “People who bought x also bought”, or in emails sent to consumers.
With sponsored listings brands can quickly and easily change their keywords, bids, and targeting to reflect changing market conditions. For example, a brand that sells winter clothing could adjust its sponsored listings campaigns to capitalize on the winter holiday season. They could add keywords related to winter holidays, such as "Christmas gifts" and "New Year's Eve party supplies." They could also adjust their bids to increase the visibility of their products during the holiday season.
Another example would be a brand that is launching a new product. They could adjust their sponsored listings campaigns to target people who are interested in the product category. They could also use negative keywords to exclude people who are not interested in the product.
Conclusion
With the change in consumer behavior to favor e-commerce, sponsored listings have emerged as vital tools for retailers and marketplaces. These advertising solutions, strategically positioned to align with user intent, offer a personalized and precise way to engage consumers.
EXADS empowers brands to effectively leverage sponsored listings with fully customizable ads and targeting options that allow for a personalized advertising experience. These capabilities ensure relevance, enhance visibility, and drive consumer engagement, redefining success in the digital marketplace. Contact us today to learn more!